The Shoe will pay county property taxes as normal starting in 2011 but will receive a $2,334 refund each year for 15 years.

"It's really good in this economic climate to see building projects move forward and see economic development in this county," Commissioner Dan Rechtzigel said. "When there's economic development in any part of the county, it helps the whole county."

Red Wing's Port and Housing and Redevelopment authorities had already agreed to loan the Shoe up to $300,000, the amount Shoe officials say they need to build an elevator inside the company's new retail location at 315 Main St.

The county's abatement agreement means the city's loan to the Shoe will now be $265,000.

"We think it's great that both the city and the county were partners in this project," said Peter Engel, director of marketing for the Shoe. "We see it benefiting the city of Red Wing and the county. A strong Main Street is good for the city, it's good for the county."

Shoe officials had originally planned to invest about $1.2 million in the old Ben Franklin building, creating 8,000 square feet of retail space.

Officials say the additional $300,000 will be used to install an elevator allowing them to develop the building's basement and increase the store's retail space to 16,000 square feet.

The new store would be part factory outlet, part museum. It will create five full-time equivalent positions, with eight new employees hired.

Officials expect around 26,000 people to visit the new store when it opens.

"I think Red Wing Shoe has done a lot for the city of Red Wing and community," Commissioner Ron Allen said. "I think this is one way the city and county can support them."